ICG-Longbow Senior Secured UK Property Debt Investments has entered into a new £24.6m loan commitment to an affiliate of RoyaleLife. The company is participating in a larger £142.7m loan facility, along with two other funds managed by the Investment Adviser, in line with its investment criteria.
The loan will refinance a portfolio of 10 assets in the residential bungalow homes sector. It carries a four-year term and has an initial LTV ratio of 78.9%. Day 1 drawings on the loan will be about £20.3m, with the company providing a committed capital expenditure facility in support of the borrower’s business plan.
On completion, the company’s total invested capital will be £112.5m with undrawn follow-on commitments of £10.3m. Portfolio LTV will be 62.5% with a weighted average loan duration of about 2.1 years. The RoyaleLife loan is accretive for shareholders, with the company’s pro forma weighted average interest coupon rising to 7.06%. Additionally, the loan contains significant contracted exit fees, which further boost the returns from the transaction.
Currently, the company is executing an additional hotel investment of about £15.3m and office investment of around £6.5m, which it expects to sign in the coming weeks. To finance the RoyaleLife transaction and this immediate pipeline, the company has drawn down £10m on its revolving credit facility.